Freshly-brewed coffee sits on a hot plate in a Tim Hortons outlet in Oakville, Ont. on Monday September 16, 2013. THE CANADIAN PRESS/Chris Young

Tim Hortons parent company expects menu price increases in 2022 amid higher inflation

Tim Hortons parent company expects menu price increases in 2022 amid higher inflation

Menu prices are expected to edge up at Tim Hortons in the coming months as the coffee and doughnut shop grapples with ongoing supply chain snags and higher food and labour costs.

The chain’s parent company Restaurant Brands International Inc. said Tuesday it recorded a surge in commodity volatility and elevated inflation in its latest quarter.

“Given the level of commodity costs and labour inflation we’re seeing, we expect additional price increases in 2022,” José Cil, CEO of the company that also includes Burger King, Popeyes Louisiana Kitchen and Firehouse Subs, said during a call with analysts.

His comments came as RBI raised its dividend and reported its fourth-quarter profit and revenue rose compared with a year ago.

While the results topped expectations, the company is continuing to struggle with staffing shortages and supply chain issues — a situation confronting the entire restaurant industry from fast-food chains to full-service eateries.

RBI is trying to ease the labour crunch for franchisees by simplifying back-of-house processes and developing plans to help with hiring and retention, Cil said.

Yet with rapidly increasing inflation, adjusting menu prices is one of the key ways the company can recoup costs.

Menu prices are based on multiple factors, including commodity prices, shipping costs, competitor pricing and regional variances, said RBI chief corporate officer Duncan Fulton.

The company also examines market research on what consumers are willing to pay, he said.

“It’s an ongoing process,” Fulton said in an interview. “We want to stay competitive for our guests and we want to be fair to the franchisees.”

Price increases at Tim Hortons tend to be in line or just below the consumer price index, Cil said. Statistics Canada said last month the consumer price index rose 4.8 per cent in December on a year-over-year basis.

Still, improving sales are also key to the chain’s recovery out of the pandemic.

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